Why Private Limited Companies Should Register Under Udyam

It is exhilarating yet challenging to initiate and grow a business in India. One of the most popular methods of business organization in India is a Private Limited Company. It offers reliability, limited liability, and convenience of access to capital.

Is registering a company with the Ministry of Corporate Affairs (MCA) enough, though? No.

If you want your private limited company to take advantage of government schemes, low-cost funding, and other benefits, Udyam Registration is necessary. 

What is Udyam Registration?

Udyam Registration is an online Government of India procedure through which micro, small, and medium enterprises (MSMEs) get registered. It was previously done under Udyog Aadhaar, but now it is replaced by Udyam Registration.

When a company is registered, it is provided with a Udyam Certificate, verifying that it is a company in the MSME category. It is completely free, and Aadhaar, PAN, and GST information are needed only.

Eligibility for Private Limited Companies

Business entrepreneurs feel that Udyam registration is only for small shopkeepers or proprietorships. But this is a myth. Private businesses can also obtain Udyam registration if they come under the MSME category.

The criteria for MSME classification are the following:

• Micro:Investment of ₹2.5 crore and turnover of ₹10 crore or less.

• Small:Investment of ₹25 crore and turnover of ₹100 crore or less.

• Medium:Investment of ₹125 crore and turnover of ₹500 crore.

If your private limited company is within these limits, it is eligible for  Udyam registration.

Benefits of Udyam Registration for Private Limited Companies

Accessibility of Government schemes

MSME-registered companies are entitled to the benefits of various government schemes such as the CGTMSE scheme, patent registration rebate, and protection from delayed payment.

Debt-Free Loans

MSME firms avail loans from banks and financial institutions without collateral. This facility really helps private limited firms to upscale their businesses.

Lower Interest Rate Loans

Udyam-registered firms avail lower interest rate loans than regular firms. It reduces financial burden.

Priority in Government Tenders

There is a reserved quota for MSME enterprises in government tenders. It is easier for private limited companies to acquire tenders due to Udyam registration than for larger industries.

Delayed Payment Protection

When your enterprise provides a customer with goods or services and payment is made after over 45 days, Udyam registration protects you by law.

Subsidies and Concessions

MSME businesses are eligible for lower electricity bills, ISO certification incentives, and other cost concessions. That translates to the cost of operation.

Increased Credibility

Udyam Certificate gives your business formal government recognition. That instills customer, supplier, and investor trust.

Ease of access to the e-Marketplace (GeM)

Udyam-registered companies can easily get listed on the Government e-Marketplace (GeM) and directly sell products/services to government departments.

Why do private limited companies delay Udyam registration?

Some business owners believe that MCA registration is sufficient. But MCA only confers legal recognition to the company, whereas Udyam registration helps the business get financial benefits and security.

If your business is eligible, it is in your best interest to register it as soon as possible because:

• The government offers various facilities for encouraging MSMEs.

• Registered companies get a competitive advantage.

• It is an entirely online and easy process.

• It's beneficial in the long run.

Udyam Registration Process

1. Visit the official Udyam Registration portal.

2. Give Aadhaar, PAN, and company information.

3. Give GST and bank details.

4. Submit.

5. Download the sanctioned Udyam Certificate.

The entire process will not take longer than a few minutes.

You Can Apply for Udyam Annexure Download Through Udyam Portal

Conclusion

Private businesses already possess a strong and reliable foundation in India's commercial space. But Udyam registration provides them with additional benefits that have a direct impact on development and competitiveness.

Privileges like government schemes, low-interest financing, subsidies, priority in tenders, and legal support are a strong basis for any private limited business to grow.

So, if your private limited company falls under the MSME category, have Udyam registration done today. It is easy, it is free, and it is full of opportunities.